The latest employment report from the U.S. Bureau of Labor Statistics and Arkansas Department of Workforce services shows a slight weakening of labor market conditions during March. Nevertheless, the trends remain positive and March appears to be a weather-related anomaly.
The unemployment rate in Arkansas remained at 5.6% after being revised upward from 5.5% to 5.6% for February. Nationwide, the unemployment rate was unchanged at 5.5%. The number of unemployed Arkansans increased by 777, the first monthly increase since February 2011. On the other hand, the number of employed was up by 3,890 and the labor force increased 4,667. This was the 17th consecutive monthly increase in household employment, and the 11th consecutive month of labor force expansion.
Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
Payroll Survey Data from the Nonfarm payroll survey showed a contraction of jobs in March, with employment down 6,700 after a downward revision of 1,400 to the February total. As shown in the table below, the bulk of the job losses were in construction. According to the news release from the Arkansas Department of Workforce Services, the decline in construction took place “as many projects were temporarily shut down due to weather conditions.” Indeed the National Weather service reported that “It was a near record wet March, with a snowstorm to start the month and severe weather picking up toward the end.
In addition to construction, employment in Retail Trade was also down on a seasonally adjusted basis, reflecting a slower-than-usual start to the spring shopping season. Notable monthly declines also appeared in the employment data for Professional & Business Services and Leisure & Hospitality Services. Compared to a year ago, however, employment is up in every major sector except mining and logging, with a total employment increase of 22,200 (1.9%).
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
With the March decline, Arkansas payroll employment dropped back below it’s pre-recession level, after having slightly exceeded that level in February.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
New data on metro area employment and unemployment came out this morning. As we reported last month, the metro area data are being revised significantly, taking into account new methodology and source information, as well as new definitions for many of the metro areas themselves. Final revisions will not come out until April 21, so the current data remain “provisional.”
The news release from the Bureau of Labor Statistics reported that “unemployment rates were lower in February than a year earlier in 366 of the 387 metropolitan areas.” All eight of the metro areas that include parts of Arkansas were included in that total. As shown in the table below, the unemployment rate has fallen by over a full percentage point in every metro area except Fayetteville-Springdale-Rogers. The largest decline has taken place in Pine Bluff — down from 9.6 a year ago to 7.9 in February 2015.
Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
The calculation of smoothed seasonally-adjusted metro area unemployment rates has been discontinued until after the final data revisions are complete, so we have no official information on seasonally-adjusted rates. Lacking that information, it is not possible to make meaningful month-to-month comparisons.
Payroll Data Nonfarm payroll employment was up by 0.4% in Arkansas for the month of February, but the gains were not evenly dispersed across the state. Four metro areas saw increases, while four saw decreases. Compared to the previous February, however, seven of the state’s eight metro areas have seen increases in payroll employment, with only Pine Bluff continuing to see a downward drift. Compared to the national employment trough of February 2010, only Pine Bluff and Texarkana have experienced net decreases. Three metro areas now have higher levels of employment than before the 2008-09 recession, Fayetteville, Jonesboro, and Little Rock.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
(Note: With the redefinition of the Texarkana MSA, seasonal adjustment factors have been deemed unreliable for now and no seasonally-adjusted data released by the Bureau of Labor Statistics. The data for Texarkana in the table above have been seasonally adjusted by the Institute for Economic Advancement.)
Today’s report on state level employment and unemployment was another in a recent series of upbeat reports. The headline was another downtick in the unemployment rate, from 5.6% to 5.5%. Over the past 12 months, the unemployment rate in Arkansas has fallen by one full percentage point. The national unemployment rate in February was also 5.5%.
Source: Bureau of Labor Statistics
The underlying components of the unemployment rate–derived from the household survey–continue to trend in positive directions. The number of unemployed Arkansans was estimated to have declined by 858 from January to February, and has fallen by more than 10,000 over the past 12 months. Meanwhile, the number of employed increased by 5,750 for the month and is up by nearly 43,000 since February of 2014. The strong gains in employment have also driven labor force participation higher. The labor force was up by 4,900 for the month.
Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
Payroll Employment: Total nonfarm payroll employment was up by 5,200 for the month (seasonally adjusted). The gains were largely attributable to increases in two service sector categories: Professional & Business Services (+2,100) and Leisure & Hospitality Services (+3,100). Changes in other sectors were mixed. Manufacturing employment showed a disappointing loss of jobs (-1,800), but construction employment was up for the fourth consecutive month. From February 2014 to February 2015, total payroll employment has increased by 29,400 — a growth rate of 2.5%.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
Since the employment trough of February 2010, total payroll employment has increased by 61,100 and is now above the pre-recession employment level by 3,700 jobs (0.3%). By comparison, total employment for the U.S. in February was 2.0% above pre-recession levels.
New data on metro area employment and unemployment came out today. The metro data were subject to the same data revisions that we’ve seen for the state-level data already. The household employment and unemployment data were estimated using the “new generation of time-series models,” and updated to incorporate updated estimation inputs and population controls, and the payroll data were revised to reflect the annual benchmarking process. Just to make it more complicated, today’s report incorporated new geographic delineations for metropolitan statistical areas. Three metro areas in Arkansas were affected by the new definitions: Fort Smith, Memphis, and Texarkana (see endnote*). Moreover, the revision process is not over: The not seasonally adjusted data from 2010 forward will be comprehensively revised again on April 21, and smoothed seasonally-adjusted metropolitan area estimates will not be available until after that revision.
Today’s report began with the summary statement that unemployment rates in January were lower than a year earlier in 339 of the nation’s 387 metro areas. All eight of the metro areas that cover parts of Arkansas were included in this total. As shown in the table below, unemployment rates in Arkansas have fallen by varying magnitudes, ranging from -0.2 percentage points in Memphis to 1.4 percentage points in Pine Bluff. As of January 2015. five metro areas had unemployment rates lower than the statewide average of 6.5% (not seasonally adjusted).
Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
The revisions to metro area unemployment rates were generally not substantial. As shown in the next table, revisions to the most recent month previously reported (December 2014) were quite minor, even for the metro areas with new geographic delineations. The revisions had somewhat larger impacts on previous months’ observations, affecting the December 2013-December 2014 year-over-year changes. Generally speaking, unemployment rates at the end of 2013 were revised downward, reducing the magnitude of unemployment declines measured over the course of 2014.
Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
Payroll Employment The data for nonfarm payroll employment incorporate new metro area delineations, as well as the annual comprehensive benchmark revisions. The latest data and growth rates are summarized in the following table:
Source: Bureau of Labor Statistics, Current Employment Statistics (CES). Note: Data for Texarkana are not presently available on a seasonally adjusted basis and have been seasonally adjusted by the Institute for Economic Advancement.
From December 2014 to January 2015, employment dropped by 1.5% in Pine Bluff, and by 0.1% in Fayetteville and Fort Smith. Other metro areas around the state saw month-over-month gains. Compared to the previous January, employment in all metro areas except Pine Bluff have seen increases, with the largest gains in Jonesboro and Fayetteville. Three metro areas are now showing higher levels of payroll employment than before the recession.
To get a sense of how the payroll data revisions affected recent employment growth, the following set of figures compares the revised data to previously published statistics. In several metro areas, we see the same pattern as in the statewide data revisions; namely, a downward revision to employment growth in late 2013 and a stronger pick-up of growth in 2014. The data for Northwest Arkansas show a substantial upward revision over the course of 2014 with the cumulative impact measuring nearly 8,000 additional jobs (+3.6%) counted by December 2014. At the other extreme, the data for Pine Bluff were revised downward, with the cumulative impact amounting to nearly 1,000 fewer jobs (-2.6%) than previously estimated at the end of last year. Data for Fort Smith, Memphis and Pine Bluff show level shifts associated with the revised metro area delineations.*
Source: Bureau of Labor Statistics
*Note: Fort Smith, Memphis, and Texarkana were subject to revised geographic boundaries (OMB Bulletin No. 13-01). Fort Smith was redefined to exclude Franklin County, AR; Memphis was revised to include Benton County, MS; and Texarkana’s delineation was expanded to include Little River County, AR.
The December report on state employment and unemployment showed continuing improvement in Arkansas labor markets. For the fourth month in a row, the number of unemployed declined and the number of employed increased sharply. In fact, the household survey shows a three month employment gain of over 29,000 — an unprecedented rate of increase. As a result, the state’s total labor force has expanded by over 24,000 in the past three months, and the unemployment rate has declined by one-half percentage point to 5.7%.
Source: Bureau of Labor Statistics – Local Area Unemployment Statistics (LAUS)
The volatility of statistics from the household survey has been particularly large in recent months. When the annual averages are published on March 4, the labor force and unemployment data will be revised using a new generation of time-series models. The updated statistics will also will also incorporate updated estimation inputs and population controls from the Census Bureau. It will be interesting to see how these revisions affect the unusual patterns of the past year or so. In the meantime, the existing data are clearly indicating improving conditions over the second half of 2014.
Payroll Survey The improvement seen in the statistics from the household survey are reinforced by recent observations of employment growth from the payroll survey. The report for November shows an increase of 4,300 jobs for the month (seasonally adjusted), with a 12-month cumulative increase of 22,600. Assuming that these figures are sustained after the upcoming benchmark revisions (see below), December’s report marked a milestone: Since the employment trough of February 2010 the Arkansas economy has now added more than 57,000 jobs, bringing total employment to a point slightly higher than it was before the recession officially hit the economy.
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
The December employment increase was largely attributable to a gain in Leisure & Hospitality Services. The not-seasonally adjusted data featured by the Arkansas Department of Workforce Services showed a slight decline in this category, but the decline was far less than would be expected in a typical December — hence, the gain in seasonally-adjusted employment. Similar seasonal factors affected Education and Health, and State & Local Government (in both cases, due to winter break at schools).
Over the past twelve months, payroll employment has increased 22,600, with notable gains in two sectors that have been slow to recover from the great recession: Construction and Manufacturing. Gains in Education & Health Services and Leisure & Hospitality Services also contributed to the overall year-over-year increase.
Upcoming Benchmark Revisions When the next payroll data release comes out on March 17, the payroll data will be revised to incorporate new 2014 benchmarks. We had previously estimated that the revised data will show significantly weaker job growth over the past two years — with downward revisions expected to be in the range of 9 to 10 thousand jobs. Good news has arrived since those forecasts: The Quarterly Census of Employment and Wages statistics for the second quarter of 2014 indicates a sharp upward revision to the current data are in order. As a result, while we are still anticipating downward revisions to the data for the second half of 2013, more recent data now appear to be more closely aligned with currently published data. Hence, as shown in the figure below, the revised statistics will show that sluggish job growth prevailed through much of 2011 through 2013, but that growth accelerated sharply in 2014. It is still possible that the revisions will incorporate QCEW data from the third quarter as well, but those data are not yet available to the public and so are not incorporated in our current expectations.
Sources: Bureau of Labor Statistics; Institute for Economic Advancement.
After revision, our best estimate is that total payroll employment for the latter half of 2014 will be unaffected. Nevertheless, some of the components of payroll employment are likely to show revised growth patterns. The set of figures below illustrates the nature (and variety) of some of the expected revisions, using quarterly averaged data.
Sources: Bureau of Labor Statistics; Institute for Economic Advancement.
These expected revisions are, at this point, only estimates. Especially when it comes to the disaggregated sector-by-sector data, the new figures may differ from these projections. And although some sectors are likely to experience some downward revisions in the level of employment, the trend over time is positive for the most part — with or without the revisions.
The Bureau of Labor Statistics released new data on metro area unemployment and employment yesterday. The report noted that unemployment rates in November were down compared to the previous year in 341 of the 372 metropolitan areas in the nation. The eight metro areas that contain portions of Arkansas were all included in that total. Not-seasonally adjusted unemployment rates declined by more than a full percentage in each of the state’s metro areas over the past 12 months, with the largest decline being a 2.7 percent drop in Pine Bluff.
In the recent statewide unemployment report, Arkansas’ unemployment rate dropped by three-tenths of a percent in November (seasonally adjusted). Comparable figures for the state’s metro areas do not uniformly reflect this dramatic decline. From October to November, data from the Smoothed Seasonally Adjusted Metropolitan Area Estimates show declines of only one-tenth in Fort Smith, Hot Springs, Jonesboro and Memphis. Texarkana was down two-tenths and Pine Bluff was down three-tenths. Unemployment rates in Fayetteville and Little Rock were unchanged. Although the magnitude of unemployment rate declines were smaller for most metro areas than the statewide average, the underlying components were all generally encouraging. The number of unemployed was down in all eight metro areas, and the number of employed was higher in all except Memphis.
Source: Bureau of Labor Statistics
Payroll Employment Nonfarm payroll employment increased by 0.5% statewide in November, but the gains were not reflected evenly across the state’s metro areas. In a fact, payroll employment was down in both Hot Springs, Memphis and Pine Bluff. Employment in Texarkana was unchanged and Little Rock saw only a slight increase. Compared to a year ago, employment has declined in Fort Smith and Pine Bluff, but has increased in the state’s other metro areas. Only Jonesboro has surpassed the nationwide growth rate of 2.0%. In fact, at 2.9%, Jonesboro is the only metro area in the state to be growing faster than the statewide average of 1.5%. Compared to pre-recession levels of seven years go, employment has increased in Fayetteville and Jonesboro, but is still lagging behind in most other metro areas.
Unemployment rates declined in all of Arkansas’ metro areas in October. On a year-over-year basis, the not-seasonally adjusted numbers showed declines ranging from 1.5% in Fayetteville to 2.9% in Pine Bluff. The eight metro areas that include parts of Arkansas were among the 354 out of a total of 372 that saw declines from the previous year. Smoothed seasonally adjusted estimates showed monthly declines in all eight metro areas as well. Unemployment declined by 0.3% from September to October in Pine Bluff, and 0.2% in Fort Smith and Memphis. Rates were down by 0.1% in the remaining metro areas. Moreover, household employment and labor force figures showed monthly increases in all of Arkansas metro areas except Memphis.
Source: Bureau of Labor Statistics
Payroll employment reports were more mixed. Total nonfarm payrolls were down slightly in Fayetteville, Fort Smith and Texarkana, but were higher in Hot Springs, Jonesboro, Memphis and Pine Bluff. Employment in Little Rock was unchanged. The increase in Pine Bluff was particularly notable: up 1.7% for the month.
Source: Bureau of Labor Statistics
There are still only two metro areas in the state that have seen net employment gains compared to pre-recession levels (December 2007): Fayetteville and Jonesboro. The unchanged employment figure for Little Rock left the total unchanged since the pre-recession peak. Three of the state’s metro areas have actually seen continued employment declines since the trough of February 2010: Fort Smith, Pine Bluff, and Texarkana.
In September, unemployment rates edged down in five of Arkansas’ metro areas and were unchanged in the other three. Smoothed seasonally adjusted estimates of unemployment were down 0.1 percentage point in Fayetteville, Fort Smith, Little Rock, Pine Bluff, and Texarkana. Rates were unchanged in Hot Springs, Jonesboro, and Memphis. Since September of 2013, unemployment rates have fallen more than a full percentage in all of the state’s metro areas.
Source: Bureau of Labor Statistics
While unemployment rates continue to trend downward, payroll employment growth rates are diverging among Arkansas metro areas. In September, employment was down in Hot Springs and Memphis, was unchanged in Pine Bluff, and was up in the remaining MSAs. The largest increases were in Jonesboro (+1.7%) and Fayetteville (+1.0%). Over the past 12 months, employment has increased in every metro area except Pine Bluff.
Source: Bureau of Labor Statistics
As show in the last column of the table above and in the chart below, the longer-run trends of payroll employment differ considerably among metro areas. Fayetteville and Jonesboro continue to see employment growth well above the previous cyclical peak. As of September, Little Rock joined the list of metro areas where employment exceeded pre-recession levels. In the remaining metro areas, employment growth since December 2007 remains negative. In Fort Smith, Pine Bluff and Texarkana, employment has fallen, on net, since the labor market recovery began in February 2010.
Latest data from the Arkansas Department of Workforce Services and the U.S. Bureau of Labor Statistics showed the Arkansas unemployment rate ticking down to 6.2% in September, down from 6.3% in August (seasonally adjusted). The number of unemployed in the household survey declined by about 850, while the number employed increased by more than 4,500. As a result, the size of the labor force was up by 3,700. Both employment and labor force participation had been sliding downward since March of this year. September’s upticks suggest that the downward trends have subsided.
Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)
Payroll Employment Nonfarm payroll employment increased by 2,900 in September, following a revised increase of 800 in August (seasaonally adjusted). The not-seasonally adjusted data released by the Arkansas Department of Workforce Services showed a monthly increase of over 15,200. However, that increase was entirely attributable to the start of the school year. State and local government employment was up 13,100 (reflecting employment public schools, colleges and universities), while employment in Educational services was up 2,100 (reflecting employment at private schools). The seasonally adjusted data (shown in the table below) revealed a strong gain in Professional & Business Services (+2,300). Construction emp0loyment was up slightly (+800) while manufacturing employment declined a bit (-700).
Source: Bureau of Labor Statistics, Current Employment Statistics (CES)
Overall, the current statistics show an employment increase of 43,400 since the trough of February 2010, leaving the state down by only 13,600 jobs relative to pre-recession levels. However, the data for the past 18 months is subject to annual benchmark revisions that will ultimately be published in March 2015. As is the tradition here at the Arkansas Economist, we’ve taken a look at the underlying detailed data in order to anticipate the nature of the visions — an exercise we’ve called “forecasting a revision of history.”
At the Little Rock Regional Economic Briefing last week, we presented the most recent version of the forecasted revision of history. Using data from the Quarterly Census of Employment and Wages (QCEW) through March 2014, the next round of revisions to nonfarm payroll employment are expected to show a downward adjustment of approximately 9,400 jobs. As shown in the figure below, the revisions will primarily effect the spurt of job growth that show up in the current data for the second half of 2014. After applying the expected revisions to the newly-released statistics, the totals in the table above would be modified to show a net gain of only 34,000 jobs since February 2010, leaving total employment 23,000 below pre-recession levels.
Sources: Bureau of Labor Statistics (CES, QCEW), and author’s calculations.
This morning, the Bureau of Labor Statistics (BLS) released new information on unemployment and employment in metropolitan areas. The BLS News Release reported that unemployment rates were down from a year earlier in 322 of the nations 372 metropolitan areas. All eight of Arkansas’ metro areas were included in that total, with the year-over-year declines ranging from 0.9% in Fayetteville to 1.8% in Pine Bluff.
The not-seasonally adjusted data show that the unemployment fell rather sharply from July to August, but that is a typical seasonal effect. (For example, over the past 10 years, the not-seasonally adjusted unemployment rate for Arkansas has, on average fallen by 0.57% between July and August, while the seasonally adjusted average was +0.03% for the same monthly change.) Data from the Smoothed Seasonally Adjusted Metropolitan Area Estimates show that there was little change in metro-area unemployment rates after taking account of the usual seasonal swing: Unemployment rates declined by one-tenth of a percentage point in Fort Smith and Pine Bluff, increased by one-tenth in Memphis, and were unchanged in the remaining metro areas.
Source: Bureau of Labor Statistics
Over the past several months, we have noted a sharp decline in labor force participation in Arkansas. In the report on statewide unemployment in August, we saw a slowdown of that trend. As shown in the figure below, most of the state’s metro areas have shown a similar downward trend in the size of their labor forces since March 2014. The weakening of the downward trend is also evident in most of the state’s metro areas (with the notable exception of Memphis).
There is no clear explanation of why we have seen such a sharp downward trend since spring. One pattern that appears to generally hold in the figure below is the relationship between cumulative labor force contractions and the more recent weakening of the downward trend. In particular, the metro areas that have experienced the largest cumulative reductions in labor force participation during 2013 and 2014 continue to trend downward. The weakening of the downward trend is more apparent in metro areas that have only recently been subject to a declining labor force. In fact, the labor force in Jonesboro — where cumulative increases over the past two years have been the largest — edged slightly higher in August.
Source: Bureau of Labor Statistics (Smoothed Seasonally Adjusted Metropolitan Area Estimates)
Payroll Employment Statewide payroll employment growth was essentially zero in August, with metropolitan areas showing a wide range of changes. From July to August, employment was down in four metro areas (Little Rock, Memphis, Pine Bluff and Jonesboro) and was up in the remaining four (Fayetteville, Texarkana, Fort Smith and Hot Springs). Over the past year, only Pine Bluff has seen a net reduction in payroll employment (-1.4%), with increases in other metro areas ranging from +0.5% in Fort Smith to +1.9% in Jonesboro. Compared to pre-recession employment levels, only Jonesboro and Fayetteville have seen net increases.
